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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 13, 1998
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Wells Real Estate Fund X, L.P.
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(Exact name of registrant as specified in its charter)
Georgia
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(State or other jurisdiction of incorporation)
0-23719 58-2250093
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(Commission File Number) (IRS Employer Identification No.)
3885 Holcomb Bridge Road, Norcross, Georgia 30092
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 449-7800
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(Former name or former address, if changed since last report)
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On February 13, 1998, Fund IX and Fund X Associates (the "Fund IX-X Joint
Venture") acquired a two story office building with approximately 106,750
rentable square feet located in Louisville, Boulder County, Colorado (the
"Ohmeda Building") from Lincor Centennial Ltd., a Colorado limited partnership
("Lincor"), pursuant to that certain Agreement for the Purchase and Sale of
Property (the "Contract") between Lincor and Wells Real Estate Fund X, L.P. (the
"Registrant").
The Fund IX-X Joint Venture is a joint venture formed on March 20, 1997
between the Registrant and Wells Real Estate Fund IX, L.P. ("Wells Fund IX") for
the purpose of the acquisition, ownership, development, leasing, operation, sale
and management of real properties. The investment objectives of Wells Fund IX
are substantially identical to those of the Registrant.
The rights under the Contract were assigned by the Registrant, the original
purchaser under the Contract, to the Fund IX-X Joint Venture at closing. The
purchase price for the Ohmeda Building was $10,325,000.00. The Fund IX-X Joint
Venture also incurred additional acquisition expenses in connection with the
purchase of the Ohmeda Building, including attorneys' fees, recording fees and
other closing costs, of approximately $6,644.25.
The Registrant contributed $6,887,762.83 to the Fund IX-X Joint Venture for
its share of the purchase of the Ohmeda Building, and Wells Fund IX contributed
$3,460,192.32 to the Fund IX-X Joint Venture for its share of the purchase of
the Ohmeda Building. All income, loss, profit, net cash flow, resale gain and
sale proceeds of the Fund IX-X Joint Venture are allocated and distributed
between the Registrant and Wells Fund IX based upon their respective capital
contributions to the joint venture. The Registrant has made total capital
contributions to the Fund IX-X Joint Venture of $10,387,762.83 and currently has
an equity percentage interest in the Fund IX-X Joint Venture of 59.74%, and
Wells Fund IX has made total capital contributions to the Fund IX-X Joint
Venture of $7,001,956.95 and currently has an equity percentage interest in the
Fund IX-X Joint Venture of 40.26%.
As set forth above, the Ohmeda Building is a two story building containing
approximately 106,750 rentable square feet which was completed in 1988. The
building was designed to accommodate the needs of a high-technology tenant, and
to provide the tenant substantial interior flexibility in order to accommodate
new product developments, changes in electronics manufacturing techniques and
the introduction of automated material handling systems. The Ohmeda Building is
modular re-tan brick with flush mortar joints and energy efficient insulated
solarban glass set in a clear aluminum mullion system. The office area
represents approximately 47% of the building area, and the non-office area
represents approximately 53%. The lower level has 17 foot high ceilings and is
divided into three areas: the production area, the materials and finished goods
handling area, and the support administration, exercise room and cafeteria area.
The cafeteria and the exercise room contain a glass curtain wall offering
panoramic views of the mountains to the west. The upper level on the west side
contains managerial and financial offices, as well as research and employee
amenity space.
The site is approximately five miles southeast of Boulder and approximately 17
miles northwest of Denver, situated near Highway 36 (Centennial Parkway), which
is the main thoroughfare between Boulder and Denver. The site is a 15 acre
tract of land in the Centennial Valley Business Park in Louisville, Colorado
with scenic views both to and from the site. The site is situated approximately
100 feet above Centennial Parkway with access by a "Z" curve roadway east of the
site. All of the Ohmeda Building access points, including a glass vestibule
entry court, are turned away from the strong winds from the west. The parking
area, which contains approximately 500 parking spaces, is concealed from the
view of Centennial Parkway and is open to the scenic views of the mountains.
The entire 106,750 rentable square feet of the Ohmeda Building is currently
under a net Lease Agreement dated February 26, 1987, as amended by First
Amendment to Lease dated December 3, 1987, and as amended by Second Amendment to
Lease dated October 20, 1997 (the "Lease") with Ohmeda, Inc., a Delaware
corporation ("Ohmeda"). The Lease was assigned to the Fund IX-X Joint Venture
at the closing. The Lease currently expires
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in January 2005, subject to (i) Ohmeda's right to effectuate an early
termination of the Lease under the terms and conditions described below, and
(ii) Ohmeda's right to extend the Lease for two additional five year periods of
time.
Ohmeda is a medical supply firm based in Boulder, Colorado and is a worldwide
leader in vascular access and haemodynamic monitoring for hospital patients.
Ohmeda also has a special products division, which produces neonatal and other
oxygen care products. Ohmeda recently extended an agreement with Hewlett-
Packard to include co-marketing and promotion of combined Ohmeda/H-P neonatal
products.
The obligations of Ohmeda under the Lease have been guaranteed by The BOC
Group, Inc., a Nevada corporation (the "Guarantor"), which is a wholly-owned
subsidiary of BOC Holdings, whose ultimate parent is The BOC Group plc, an
English corporation. Ohmeda is a wholly owned subsidiary of the Guarantor. The
Guarantor, which is in the businesses of gases and related products, vacuum
technology and health care, reported total consolidated sales of in excess of $2
billion for its fiscal year ended September 30, 1997, and a net worth of in
excess of $462 million.
The monthly base rental payable under the Lease will be $83,709.79 through
January 31, 2003; $87,890.83 from February 1, 2003 through January 31, 2004; and
$92,249.79 from February 1, 2004 through January 31, 2005. Under the Lease,
Ohmeda is responsible for all utilities, taxes, insurance and other operating
costs with respect to the Ohmeda Building during the term of the Lease. In
addition, Ohmeda shall pay a $21,000 per year management fee for maintenance and
administrative services of the Ohmeda Building. The Fund IX-X Joint Venture, as
landlord, is responsible for maintenance of the roof, exterior and structural
walls, foundations, other structural members and floor slab, provided that the
landlord's obligation to make repairs specifically excludes items of cosmetic
and routine maintenance such as the painting of walls.
The Lease contains an early termination clause that allows Ohmeda the right to
terminate the Lease, subject to certain conditions, on either January 31, 2001
or January 31, 2002. In order to exercise this early termination clause, Ohmeda
must give the Fund IX-X Joint Venture notice on or before 5:00 p.m. MST, January
31, 2000, and said notice must identify which early termination date Ohmeda is
exercising. If Ohmeda exercises its right to terminate on January 31, 2001,
then Ohmeda must tender $753,388.13 plus an amount equal to the amount of real
property taxes estimated to be payable to the landlord in 2002 for the tax year
2001 based on the most recent assessment information available on the early
termination date. If Ohmeda exercises its right to terminate on January 31,
2002, then Ohmeda must tender $502,258.75 plus an amount equal to the amount of
real property taxes estimated to be payable to the landlord in 2003 for the tax
year 2002 based on the most recent assessment information available on the early
termination date. At the present time, real property taxes relating to this
property are approximately $135,500 per year. The payment of these amounts by
Ohmeda for early termination must be made on or before the 180th day prior to
the appropriate early termination date. If the amount of the real property
taxes actually assessed is greater than the amount paid by Ohmeda on the early
termination date, then Ohmeda shall pay the landlord the difference within
thirty (30) days of the receipt of landlord's demand for said difference. If
the amount of the real property taxes actually assessed is less than the amount
paid by Ohmeda on the early termination date, then Ohmeda shall be entitled to a
refund from the landlord of the difference within thirty (30) days of the
landlord's receipt of the real property tax invoice for the appropriate tax
year.
The Lease contains a provision whereby the tenant has the option to extend the
primary lease term for up to two consecutive five year terms at the then current
market rental rates.
In addition, the Lease contains an option to expand the premises by an amount
of square feet up to a total of 200,000 square feet which, if exercised by
Ohmeda, will require the Fund IX-X Joint Venture to expend funds necessary to
acquire additional land, if such land is necessary to such expansion and
available for purchase for said expansion purposes, and to construct the
expansion space. Ohmeda's option to expand the premises is subject to
deliverance of at least four months' prior written notice to the Fund IX-X Joint
Venture. During the four months subsequent to the notice of Ohmeda's intention
to expand the premises, Ohmeda and the Fund IX-X Joint Venture shall negotiate
in good faith and enter into an amendment to the Lease for the construction and
rental of the
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expansion space. If Ohmeda exercises its option to expand the premises, the
right to terminate clause described above will automatically be canceled, and
the primary lease term shall be extended for a period of ten years from the date
on which a certificate of occupancy is issued by the City of Louisville with
respect to the expansion space. The base rental for the expansion space payable
under the Lease shall be calculated to generate a rate of return to the Fund IX-
X Joint Venture on its project costs and any retrofit expenses with respect to
the existing premises incurred by landlord over the new, ten year extended
primary lease term, equal to the prime lending rate published by Norwest Bank,
N.A. on the first day of such extended primary lease term, plus 3.0%, plus full
amortization of the tenant finish costs with respect to the expansion space and
the existing premises. This base rental shall be payable through January 31,
2005. The base rental payable under the Lease from February 1, 2005 through the
remaining balance of the new, extended ten year primary lease term, shall be
based on a combined rental rate equal to the sum of (i) the base rental payable
by Ohmeda during lease year number seven for the existing premises, plus (ii)
the base rent payable by Ohmeda during lease year number seven for the expansion
space, plus an amount equal to 2% of the combined rental rate. Thereafter, the
base rent payable for the entire premises shall be the base rent payable during
the previous Lease year plus an amount equal to 2% of the base rent payable
during such previous Lease year.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Audited Financial Statements. Since it is impracticable to provide the
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required financial statements for the acquired real property described above at
the time of this filing and no financial statements (audited or unaudited) are
available at this time, the Registrant hereby confirms that the required
financial statements will be filed on or before April 24, 1998 by amendment to
this Form 8-K, which date is within the 60 day period allowed to file such an
amendment.
(b) Pro Forma Financial Information. See paragraph (a) above.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WELLS REAL ESTATE FUND X, L.P.
Registrant
By: /s/ Leo F. Wells, III
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Leo F. Wells, III, as General Partner and
as President and sole Director of Wells
Capital, Inc., the General Partner of
Wells Partners, L.P., General Partner
Date: February 24, 1998
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